A Louisiana federal judge has blocked President Biden’s ban on new oil leases on federal lands by issuing a preliminary injunction.
According to a Wall Street Journal report, the administration had no right to stop leasing federal lands for oil and gas drilling without approval from Congress.
The White House paused new oil and gas leases on federal lands in January, saying it was going to review the margin for potential changes in the existing regulation for the issuance of oil and gas leases.
The immediate impacts of that pause were at the time considered likely to be negligible, but in the medium to long term, new regulations could have far-reaching consequences, not only on U.S. shale production and conventional production offshore but also on the oil revenues and budgets of the states where a large part of the drilling activity currently takes place on federal lands, such as New Mexico.
The industry was quick to respond to the ban, as temporary as it may be. The Western Energy Alliance, just seven days after President Biden took office, filed a lawsuit challenging his order that banned oil and nat gas leasing on federal public lands.
The WEA alleges that President Biden exceeded presidential authority and his order violates the National Environmental Policy Act, the Federal Lands Policy and Management Act, and much like Continental’s lawsuit, it violates the Mineral Leasing Act, which requires the Interior Secretary to hold quarterly lease sales.
Yet this was not the only lawsuit filed against the Biden administration because of the ban. Thirteen states also sued the federal government, including Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia.
It was on this suit that the Louisiana judge ruled, noting that the plaintiff states stood to suffer damages in the form of missed income from lease bids and bonuses from oil and gas companies.
The administration said it would comply with the ruling but will continue with its review of the oil and gas lease process.
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By Charles Kennedy for Oilprice.com
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